Main Navigation Right

SEPA Migration: Facts and Figures

SEPA Migration: Facts and Figures

European Union Regulation sets deadline for migration to
Credit Transfer and
Direct Debit

On 30 March 2012, the 'Regulation (
) No 260/2012 establishing technical and business requirements for credit transfers and direct debits in euro and amending Regulation (EC) No 924/2009' was published in the Official Journal of the European Union (
) (see 'related link' below). This legislative act is commonly referenced as the Single Euro Payments Area (
) Regulation. The
Regulation defines 1 February 2014 as the deadline in the euro area for compliance with the core provisions of this Regulation. Effectively, this means that as of this date, existing national euro credit transfer and direct debit schemes will be replaced by
Credit Transfer (
) and
Direct Debit (
).

Percentage of banks in
offering
Credit Transfer services

The European Payments Council (
) launched the
Scheme in January 2008. As of July 2012, 4,573 payment service providers (
) in 32 countries offer
services. Today, the
delivering
services represent more than 95 percent of payment volumes in Europe. The
Participant Register, which lists scheme participants, is publicly available at http://epc.cbnet.info/content/adherence_database.

Percentage of
transactions compared to the total volume of credit transfers generated by customers

A figure of 100 percent would indicate that only Single European Payments Area (
) services are used and have fully replaced non-
instruments. The
Indicators are based on aggregated data provided by clearing and settlement infrastructures in the euro area processing
transactions. This data avoids double counting by excluding, for example,
transactions sent via links between infrastructures. The data also excludes 'on-us' transactions (SCTs between accounts at the same bank) as well as transactions cleared between banks bilaterally or via correspondent banking. The ECB
Indicators also show
market uptake by country.

Percentage of banks in
offering
services

The
launched the
Core Scheme and the
Business to Business (B2B) Scheme on 2 November 2009. As of July 2012, 3,926
, representing more than 80 percent of
payments volume, have signed up to the
Core Scheme. Of those, 3,447
also adhere to the
B2B Scheme. The separate
Participant Registers for the
Core and
B2B Schemes list the participants taking part in these schemes. These registers are publicly available at http://epc.cbnet.info/content/adherence_database.

Since 1 November 2010, all
in the euro area reachable for national direct debits must be reachable for cross-border direct debits; e.g. the
Core Scheme, as mandated by Regulation (EC) No 924/2009 (Article 8).

Percentage of
transactions compared to the total volume generated by customers

The figures are based on aggregated data from several clearing and settlement infrastructures / systems located in the euro area. As such,
transactions which are cleared bilaterally or processed within the same institution are excluded from this indicator.

for cards: tracking EMV roll-out

As reported in previous issues of the
Newsletter, good progress is being made in the realisation of a
for cards. The
's
Cards Framework (SCF) outlines high level principles and rules that when implemented by the card industry, will deliver a consistent user experience to both cardholders and merchants when making or accepting euro payments or cash withdrawals. The SCF recognises the EMV standard for
-wide acceptance of card payments. EMV is an industry standard to implement chip and personal identification number (PIN) security for card transactions to combat fraud. An important indicator on the progress in this area is the number of cards, points of sales (POS) and automated teller machines (ATMs) in the market that use chip and PIN for the authorisation of a card payment. More specifically, the percentage of EMV-compliant cards, POS and ATMs in
is monitored.

Migration to chip and PIN in
is essentially complete. At the end of 2011 (estimates), 87.2 percent of cards, 94.2 percent of POS and 96.7 percent of ATMs in
were EMV-compliant. The progress of EMV roll-out, based on these
findings and other relevant data on the subject, are reflected by the ECB
Card Indicators at http://www.ecb.europa.eu/paym/sepa/about/indicators/html/index.en.html.

On 25 July 2012, the ECB published its first report on card fraud (see 'related links' below). The report, which was compiled by the Eurosystem, i.e. the ECB and the seventeen national central banks of the euro area, analyses fraud developments related to card payments in
from 2007 to 2010. The ECB press release of 25 July 2012 (see 'related links' below) highlights the main findings of the report: "Card fraud has been on a declining trend since 2007, and that technological advances have been key to increasing the security of transactions (...) The total level of fraud amounted to €1.26 billion in 2010, a 12.1% decrease since 2009. Fraud in relative terms, i.e. the share of fraud in the overall value of all transactions, fell from 0.045% in 2007 to 0.040% in 2010, after peaking at 0.050% in 2009. Between 2007 and 2010 the overall amount of fraud increased by 0.7%, but the value of transactions grew by 5.1% to around €3 trillion per year. Overall, 1.2% of cards issued within
were used fraudulently (12 cards out of every thousand). The report looks at fraud across different kinds of card (debit and credit) and card usage. In 2010 half of the value of fraud resulted from card-not-present (CNP) payments - i.e. payments via mail, telephone or the internet - while a third resulted from point-of-sale (POS) terminals and a sixth from automated teller machines (ATMs)."

The ECB press release further states: "Improvements in the security of cards and the underlying payment infrastructure are the main reason that fraud at ATMs and POS terminals was lower in 2010 than in 2007. The most important enhancement was the wider adoption of EMV, a chip-based standard. This offers stronger security features than conventional magnetic stripes both for the physical card (since, unlike the stripes, the chip cannot easily be duplicated) and for the technological infrastructure behind the transaction. The adoption of these safety features is recommended by the ECB and forms part of the
migration. (...) In concluding, the report says that, while on a declining trend, card fraud is an international organized activity that demands cooperative prevention measures and international standards, in particular with regard to the security of internet transactions, as well as that of cross-border transactions. It outlines the importance of more cooperation among the card payment schemes in order to identify points of compromise quickly. "

Corporate
readiness

In July 2012, gtnews published the article entitled 'Cash Management, Operational Risk and Working Capital: Most Important Areas for Treasury' (see 'related links' below) which reports on the findings of the gtnews 2012 'The Expanding Role of Treasurers Survey'. The survey identified, among other things, which areas corporate treasurers think are of greatest importance to their organisation in 2012. According to the survey, "
solutions and treasury outsourcing are viewed as the least important areas this year."

The representatives of corporates, public administrations and government agencies, who reported on their successfully completed
migration projects in this newsletter, unanimously recommended that organisations which still have to achieve
compliance by 1 February 2014, as mandated with the
Regulation, become active immediately. For further information, refer to these sources offered by the
(see 'related links' below):

Video '
for Billers': this film highlights aspects relevant for businesses and public entities transitioning to
. Both the extended and short versions with subtitles in the
languages are available.

Blog Series (Parts 1 - V): 'Get Ready for
by February 2014. Early Movers on the Customer Side Share Lessons Learnt'.

On the subject occasionally debated in the payments media, which is whether the euro debt crisis would have an impact on the
process, the gtnews survey finds: "Interestingly, even today treasurers do not believe that eurozone breakup contingency planning is of great importance to their organisation, with only 17% believing that it is 'very important' and 16% thinking it 'important'. It is, nonetheless, more than the 9% who thought it was an important or very important issue 12 months ago."

The following information reflects findings previously reported in the
Newsletter (no updated data was published since this information was first reported in the
Newsletter):

The gtnews Payments Survey 2011, asked its corporate readers to rank
instruments among regularly used methods to make and receive payments. Just over a third of respondents said they regularly made payments via
, while 14 percent used
. The results are almost identical for corporates receiving payments via
instruments. Almost 20 percent of corporate respondents already invested in
compliance and more than 40 percent said that investment plans were already in the making, whether that is within a three-month timeline or just 'at some point'. The 2011 Payments Survey results also show that some corporates are still hesitant to invest in
services. When asked if their organisation planned to make that investment in the future, 20 percent of those corporates operating in Western Europe stated they had no plans. These findings however, reflect a step forward in terms of
uptake compared to the Payments Survey 2010, when almost 50 percent of corporates said that they were not planning a
investment.

The ECB and the European Commission have also conducted surveys in the European corporate sector about practices in making and receiving payments, invoicing and migration to
. The report titled 'European Business Test Panel (EBTP)
Survey 2011. How do you pay? How would you like to pay?' (see 'related links' below), summarises the results of, and draws conclusions from, the fourth survey of this kind, which was conducted in early 2011. The report indicates that "
migration in the corporate sector is proceeding well". 22 percent of respondents indicated that they use
for more than half of their company's outgoing payments. Over 24 percent of participants responded that national credit transfers are not used any more. In comparison with this, direct debit payments are less in use. 70 percent of all respondents indicated they do not, or only infrequently, pay via national direct debits. 42 percent of responding companies however, have already made payments using
and 37 percent have already received payments via this new instrument.

Public sector
readiness

The information included here reflects findings previously reported in the
Newsletter (no updated data was published since this information was first reported in the
Newsletter).

In November 2011, the European Commission Services published the fifth survey on public administrations' preparedness and migration to
(see 'related links' below). This survey finds that public administrations' (PA) migration to
has accelerated since the last survey, with the overall
migration rate increasing from 14.5 percent in October 2010 to 24.9 percent in June 2011. The report also states:

PA in many European Union (
) Member States in the euro area seem to be taking over the lead for
migration at national level, namely in Finland (90.9 percent), Belgium (77.4 percent), Slovenia (65 percent), Austria (60 percent), Germany (37.6 percent), France (21.1 percent) and Spain (16.5 percent) and are expected to make further progress or fully complete migration to
in the coming months.

Nevertheless, a number of euro area
Member States are still lagging behind and their migration to
is progressing at an extremely slow pace, with the
rate often not exceeding one percent of total credit transfers volume, namely in Greece (0.01 percent), Estonia (0.10 percent), Ireland (0.2 percent), Slovakia (0.5 percent), Cyprus (0.8 percent), Netherlands (1.2 percent) and Italy (2.3 percent).

PA migration to
stays close to 0 percent, with only a few using
(in particular in Belgium and Germany). It is however, important to stress that direct debits are generally not used by PA, or to a very limited extent.

For information supporting market particpants to achieve
compliance by the deadline set in the
Regulation, please refer to the sources below.

Your reactions

If you would like to comment on this article, please identify yourself with your first and last name. Your name will appear next to your comment. Email addresses will not be published. Please note that by accessing or contributing to the discussion you agree to abide by the EPC website conditions of use.

In this article

Each issue of the
Newsletter monitors the latest available data reflecting the rate of
market uptake. The European Union 'Regulation (
) No 260/2012 establishing technical and business requirements for credit transfers and direct debits in euro and amending Regulation (EC) No 924/2009' (the
Regulation), defines 1 February 2014 as the deadline in the euro area for compliance with the core provisions of this Regulation. Effectively, this means that as of this date, existing national euro credit transfer and direct debit schemes will be replaced by
Credit Transfer and
Direct Debit. Etienne Goosse reports on progress achieved to date as regards migration to
.

Key Information in this Article

Data reflecting the progress of migration to
cited in this article represents the latest figures available at the time of
Newsletter publication (30 July 2012).

As of May 2012, the share of
Credit Transfers (SCTs), as a percentage of the total volume of credit transfers generated by bank customers, amounts to 28.2 percent in the euro area (European Central Bank (ECB)
Indicators).

As of May 2012, the share of
Direct Debits (SDDs), as a percentage of the total volume of direct debits generated by bank customers, amounts to 0.5 percent in the euro area (ECB
Indicators).

At the end of 2011 (estimates), 87.2 percent of cards, 94.2 percent of points of sale (POS) and 96.7 percent of automated teller machines (ATMs) in
were EMV-compliant. EMV is an industry standard to implement chip and personal identification number (PIN) security for card transactions.

In July 2012, the ECB published its first report on card fraud, which analyses fraud developments related to card payments in
from 2007 to 2010. The report states that “improvements in the security of cards and the underlying payment infrastructure are the main reason that fraud at ATMs and POS terminals was lower in 2010 than in 2007. The most important enhancement was the wider adoption of EMV (...) The adoption of these safety features is recommended by the ECB and forms part of the
migration.”

In July 2012, gtnews reported the findings of the gtnews ‘The Expanding Role of Treasurers Survey’. The survey identified the areas which corporate treasurers think are of greatest importance to their organisation in 2012. The survey found that “SEPA solutions and treasury outsourcing are viewed as the least important areas this year.”

In February 2012, the European legislator adopted the 'Regulation (
) No 260/2012 establishing technical and business requirements for credit transfers and direct debits in euro', which effectively mandates migration to
and
in the euro area by 1 February 2014. The representatives of corporates, public administrations and government agencies, who reported on their successfully completed
migration projects in previous issues of the
Newsletter, unanimously recommended that organisations which still have to achieve
compliance become active immediately. Lessons learnt and best practice identified by these early movers are highlighted in the
Video '
for Billers' (available with subtitles in the
languages), the
Blog Series 'Get Ready for
by February 2014' and the
case studies featured in this newsletter. Links to these sources are included with this article.

The gtnews survey 'The Expanding Role of Treasurers Survey' also finds that corporate treasurers "do not believe that eurozone breakup contingency planning is of great importance to their organization."

Etienne Goosse

Director General of the European Payments Council

Etienne Goosse is the Director General. He has extensive professional experience across different sectors of the payments industry. He started his career with the Belgian central bank. He held executive positions at eurocheque International, Europay International and MasterCard Europe. In his previous assignments, Mr Goosse’s responsibilities included franchise management, legal and regulatory affairs, stakeholder management as well as finance and administration. He also has an extensive track record in managing governance as well as European and public affairs.